(Reuters) - Industrial equipment maker Hillenbrand Inc (HI.N) on Friday agreed to buy plastics-processing equipment maker Milacron Holdings Corp (MCRN.N) in a cash and stock deal valued at about $2 billion, the companies said.
Hillenbrand’s $18.07 per share offer represents about 33.6% premium to Milacron’s closing price on Thursday. Milacron shares jumped 23% to $17.05 in before the opening bell.
The acquisition expands Hillenbrand’s portfolio into plastics technology and processing by adding technologies such as injection molding and extrusion, the company said.
The deal will also expand Hillenbrand’s reach in markets including construction, consumer packaging, automotive, electronics, medical and recycling.
The combined company is expected to generate annual revenue of about $3 billion and free cash flow of more than $325 million by 2021.
The deal, which is expected to close in the first quarter of 2020, includes net debt of about $686 million.
Milacron, which traces its history to 1860 as a screw shop, had filed for Chapter 11 bankruptcy protection of its businesses in 2009.
J.P. Morgan Securities LLC advised Hillenbrand on the deal, while Barclays served as adviser to Milacron.
Reporting by Ankit Ajmera and Divya R in Bengaluru; Editing by Maju Samuel